Tesla (TSLA) has responded to growing scrutiny over the way it handles data generated by its cars in China. Reuters reports that the electric vehicle giant has established a site dedicated to storing EV cars’ data in the country.
Tesla will expand the data center network to address its growing needs amid expanding car sales. China is the world’s biggest EV market and the second largest for Tesla. Tesla is setting up a platform that will allow car owners to access data generated by their cars. (See Tesla stock analysis on TipRanks)
The new data center comes on the heels of China drafting new rules designed to ensure the security of data generated by connected cars. The data regulation has been fueled by growing concerns about privacy and national security posed by some EVs.
In fact, some Chinese governmental offices have banned their staffers from parking their Tesla cars within the premises. Given that the vehicles come with mounted cameras, there are growing concerns that they pose significant security risks, as they could be used to spy on the premises.
Wells Fargo analyst Colin Langan has warned it is highly unlikely for Tesla stock to bounce back after a recent steep pullback. According to the analyst, the stock is where it should be after a 30% plus pullback from its 52-week high.
“We expect deliveries to continue to surprise to the upside near term, which gives support to [bulls],” wrote the analyst in a research note to investors. According to Langan, Tesla can build 1.7 million Model 3/Y by 2022. However, stiff competition in the EV space could pose a significant demand problem. The analyst has also warned about the potential risk of rising costs expected to eat into profit margins.
Langan has reiterated a Hold rating on Tesla with a $590 price target, implying 2.71% downside potential to current levels.
Consensus among analysts on Wall Street is a Hold based on 10 Buy, 8 Hold, and 7 Sell ratings. The average analyst price target of $645.88 implies 6.81% upside potential to current levels.
TSLA scores 8 out of 10 on TipRanks’ Smart Score rating system, implying it is likely to outperform the overall market.